Third Party Election Campaigning Getting the Balance RightThird
Party Campaigning Review
Third Party Election Campaigning – Getting the Balance Right Review
of the operation of the third party campaigning rules at the 2015
General Election
The Lord Hodgson of Astley Abbotts CBE
March 2016
Third Party Election Campaigning – Getting the Balance Right
Review of the operation of the third party campaigning rules at the
2015
General Election
The Lord Hodgson of Astley Abbotts CBE
Presented to Parliament by the Chancellor of the Duchy of
Lancaster
by Command of Her Majesty
March 2016
Cm 9205
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Foreword
I was appointed as the Reviewer of Part 2 of the Transparency in
Lobbying, Non-Party Campaigning and Trade Union Administration Act
2014 on 28 January 2015. Part 2 of the Act addresses solely
Non-Party Campaigning and consists of a series of amendments to
Part 6 of the Political Parties, Elections and Referendums Act
2000.
Conducting the Review has been interesting and challenging;
interesting because the technology used in the conduct of elections
has changed so dramatically in recent years and, indeed, is
continuing to change; challenging because the issue of campaigning
by those other than political parties has led to widely polarised
views about its role and its appropriateness.
I began my Review by seeking to understand the will and purpose of
Parliament when it approved this legislation, which enabled me to
establish some principles by which to guide the Review.
I was then able to test the practical implications of these
principles with a wide range of interested parties. This testing
included trips to the devolved administrations in Scotland, Wales
and Northern Ireland, to certain Parliamentary Constituencies
during the General Election as well as many one on one and
roundtable discussions.
Each parliamentary candidate in the 2015 General Election (as far
as they could be found) and each Returning Officer was sent a
specific questionnaire about the impact of the legislation. A
broader questionnaire was made available to third parties and to
the general public. And as the Review progressed a Call for Views
and Evidence on certain
specific topics was sent to interested parties. My special thanks
are due to all who took the trouble to respond to these
questionnaires or who gave up time to join in discussions – they
have provided the evidence on which my recommendations are
based.
In navigating the complex legislation that surrounds electoral law
and in particular the work of third parties I have had the
invaluable assistance of Helen Mountfield QC of Matrix Chambers and
Simon Steeden of Bates Wells Braithwaite solicitors who have acted
as advisors to the Review. I would also like to thank the think
tank Demos who kindly shared a piece of work looking at the use of
social media at the 2015 General Election. As can be imagined this
Review has led to a tidal wave of paper. The support team provided
by the Cabinet Office, Cathryn Hannah, David Rowland and Lucy
Gillam have coped magnificently at every stage. I am deeply in
their debt.
The conclusions and recommendations, of course, are mine alone. In
summary I have sought to make recommendations which provide a
structure which permits open, vigorous debate – an essential part
of our democratic way of life – while at the same time providing
the disclosure and transparency necessary to give our fellow
citizens confidence in the integrity of our electoral system.
The Lord Hodgson of Astley Abbotts CBE
February 2016
Table of Contents 3
Executive Summary 5
Context of the Review 9 Establishing an overarching strategy 9
Background to the regulation of third party campaigning 9 The
Principles of the Review 13 Third Party campaigning in practice at
the 2015 General Election 14 The jigsaw nature of the proposals
15
Part one – Is any regulation of third parties necessary? 17
Part two – Legislative structure 21 How are third parties defined?
21 What activities can trigger regulation? 23 To what “purpose” can
activities/expenditure be directed? 25 Who are the public and what
is a member? 29 Regulated period 36
Part three – What activity counts 41 Types of electoral campaigning
41 Staff costs 43
Part four – Levels of spending limits 45 National spending limits
45 Constituency limits 49 Elections to the European Parliament and
to the devolved legislatures 53 Targeted spending 54 Joint
campaigning 55
Part five – Registration and Regulation 59 Increase transparency
pre-election 59 Imprints 62 Registration with the Electoral
Commission 63 Reporting requirements 65 Donations 67 Role of the
regulator 68
4 Third Party Campaigning Review
Challenges for the future 73 Technological developments 73 The
convergence of online and print media 75 The impact of political
fragmentation and the rise in single issue politics 75 Elections to
the devolved legislatures 76
Summary of recommendations 77 Appendix A: Terms of reference 82
Appendix B: Methodology of the Review 84 Appendix C: Excerpts of
relevant legislation 86 Appendix D: List of registered third
parties at the 2015 General Election 90 Appendix E: Third party
expenditure at the 2015 General Election 92 Appendix F: List of
contributors to the Review 95 Appendix G: Lord Hodgson: House of
Lords Register of Interests 98
Executive Summary 5
Executive Summary
1.1 The law places limits on what third parties can spend at
elections so as to ensure fair elections, the results of which are
not distorted by excessive amounts of expenditure. These rules on
third party campaigning, originally set out in Part 6 of the
Political Parties, Elections and Referendums Act 2000 (PPERA), were
amended by Part 2 of the Transparency in Lobbying, Non-Party
Campaigning and Trade Union Administration Act 2014 (2014 Act).
The 2014 Act as a whole proved controversial. The other two
parts on establishing a statutory Register of Consultant Lobbyists
and trade union registration – not covered by the Review –
attracted criticism. The lack of pre-legislative scrutiny and the
timing of the Bill’s passage through the House of Commons also were
the subject of adverse comments.
1.2 As a result Part 2, which contains no new statutory provisions
– only amendments to existing ones, was perceived as imposing
severe restrictions on what third parties could do and say and
brought the issue of third party campaigning into the public
consciousness. The arguments surrounding the passage of the 2014
Act focused perhaps less on what the legislation was trying to
achieve and more on the perceived risk to the legitimate
campaigning of charities and the wider civil society. As a response
to this controversy Parliament saw fit to provide for a review of
third party campaigning in the light of experience gained at the
General Election.
The Third Party Campaigning Review
1.3 I have examined the efficacy of Part 6 of PPERA and the
amendments made to it by Part 2 of the 2014 Act.
1.4 Through significant engagement with over 200 interested
parties, I have sought to separate the real from the perceived
effects of the legislation and make recommendations, based on the
evidence received and of the will of Parliament in passing the
legislation, that ensure that the rules in relation to third party
campaigning are both effective and proportionate.
Getting the balance right
1.5 While some may argue there is no need to restrict what third
party campaigners can spend, my view is that the rules are
necessary to ensure that no one individual or organisation is able
to unduly influence an election through excessive spending. To
prevent this undue influence and also to inform the public there
needs to be transparency about who third party campaigners are and
what they are spending. Effective regulation which maintains public
trust in our electoral system is in the interest of us all: it
should not prohibit third parties from participating in public
discourse at election time but it must ensure that the elections
cannot be “bought”. So I do not recommend the repeal of Part 2 of
the 2014 Act.
6 Third Party Campaigning Review
1.6 But I do not believe the right balance has been struck in the
rules as presently drafted. I therefore recommend a series of
changes – which interlock so they form part of a package – which
will better reflect the realities of third party campaigning as I
found them at the 2015 General Election. In particular I have tried
to address some of the special challenges posed by ‘social media’
campaigning – a concept undreamt of in 2000 at the time of the
passage of the original PPERA (see paragraphs 3.1 – 3.18).
What should the system look like?
1.7 The regulatory system is a jigsaw – a change to one particular
aspect of the rules affects the efficacy and appropriateness of
another. The recommendations of the Review therefore need to be
seen as a package.
1.8 In this Review I describe what the legislation should be
regulating as electoral campaigning – that is activity focused on
influencing the choice of the voting public at an election. The
regulation should not capture the advocacy of an issue that an
organisation may carry out on a day to day basis – its business as
usual – nor the political campaigning it carries out directly
trying to influence political parties and individual politicians
(see paragraphs 4.10 – 4.19).
1.9 The nature of the activity sets the appropriate legal
definition. The current definition captures activity that could be
‘reasonably regarded’ as intended to influence voters, as so judged
by an outside observer. I conclude that overall this produces too
much ambiguity about what expenditure on campaigning activity is
regulated and consequently has had some perceived “chilling effect”
on the activities of third parties. It could also make third party
campaigners vulnerable to gratuitous, malicious complaints. If the
expenditure of third parties is to be limited to prevent undue
influence then it should only include the costs of activities that
are actually intended by the third party to influence voters.
Therefore that the statutory definition needs to be changed to one
of actual intention. This redefinition needs to be accompanied by
appropriate anti-avoidance measures (see paragraphs 4.20 –
4.38).
1.10 However, there does not seem to be any need to amend the
current list of types of organisations which fall under the 2014
Act. Indeed there is an argument that many commercial companies are
insufficiently aware of their obligations under the legislation
(see paragraphs 4.2 – 4.9).
1.11 Next, it is important that the definition of who the
organisation can seek to influence without having to register is
equally clear. I have concluded that unless someone is a
constitutional member of a third party and so has some direct
influence on the organisation they should be considered to be a
member of the public and any activity intended to influence their
voting at an election should be regulated. Maintaining the current
exemption for ‘committed supporters’ of an organisation in addition
to members is too undefined a term in an age of social media and it
represents a potentially serious loophole (see paragraphs 4.39 –
4.71).
1.12 A key concern for many third parties has been the length of
the regulated period. The current regulated period of 12
months for General Elections is long and has contributed to the
regulatory burden. The majority of ‘electoral campaigning’ by third
parties takes place in the four months ahead of an election and
therefore it makes sense to reduce the regulated
Executive Summary 7
period to four months for General Elections, with appropriate
anti-avoidance provisions in place to stop the expenditure rules
being flouted (see paragraphs 4.72 – 4.90).
1.13 It is not proposed that there should be any change in the
types of activity the expenditure on which is regulated (see
paragraphs 5.1 – 5.8). However, the treatment of staff costs has
caused confusion. I recommend that the staff costs of those working
specifically, in whole or in part, on the electoral campaigning
activities should continue to be covered by the rules. There could
usefully be greater clarity in the rules to ensure that de minimis
work undertaken on electoral campaigning that is ‘incidental’ to a
person’s normal job does not count (see paragraphs 5.9 –
5.17).
1.14 The spending limits are key to stopping excessive expenditure
by third parties at a national level or a constituency level and
helping to prevent undue influence. Despite the national
expenditure limits being reduced in the 2014 Act no third parties
came close to spending up to the limit at the 2015 General
Election. Therefore no changes are proposed to the national limits
(see paragraphs 6.1 – 6.15).
1.15 Constituency limits are important in stopping excessive
expenditure at a local level. The Review is not recommending any
changes in relation to the level of the constituency limits.
However, though it is outside the terms of reference of the Review,
I suggest that the Government might consider whether the RPA 1983
provisions for third parties at General Elections could usefully be
brought into line with the PPERA system. This could form part of a
wider tidying up and coordination of the two systems which, inter
alia, have different complaint and enforcement responsibilities. As
the Review was concluding the Law Commission published
recommendations on the reform of UK electoral law which seem to be
travelling in the same direction. The clarity of a single playing
field would, I believe, be welcomed by third party campaigners (see
paragraphs 6.16 – 6.35).
1.16 The expenditure limits for the Scotland, Wales and in
particular Northern Ireland for European Parliamentary elections
are low and should be reviewed, possibly using the ‘top up’
approach used in respect of General Elections. The challenges of
overlapping and confusing systems for the regulation of third
parties campaigning in the different parts of the United Kingdom
also need to be considered by all parties when the powers for
elections to the Scottish Parliament and National Assembly for
Wales are devolved to Scotland and Wales respectively (see
paragraphs 6.36 – 6.39).
1.17 No changes are proposed to the provisions for targeted
spending (see paragraphs 6.40 – 6.46). However it is clear that the
rules on joint campaigning caused concern at the time of the
passage of the Act as well as at the 2015 General Election. It must
be remembered that the reason for rules on joint campaigning is to
prevent undue influence, for example, by organisations working
together to evade the spending limits. The Review therefore
recommends a series of changes which are intended to give greater
clarity in the rules, in particular regarding the responsibilities
of a lead campaigner. Joint campaigning in and of itself should not
be inhibited, but it must, like all third party campaigning, be
subject to spending limits (see paragraphs 6.47 – 6.59).
1.18 Registration with the Electoral Commission which is published
on their website should provide greater transparency about each
individual third party campaigner so as to inform individual voters
during the election campaign itself. So I recommend that more
information
8 Third Party Campaigning Review
should be provided as to the purpose of the campaign, where that
campaigning is planned to take place and broad estimates of likely
expenditure (see paragraphs 7.1 – 7.13). The Review also recommends
further transparency on digital and social aspects of campaigning
activities with the introduction of some form of imprint (see
paragraphs 7.15 – 7.19). The expenditure threshold for a third
party to have to register with the Electoral Commission, currently
£20,000 in England, and £10,000 in Scotland, Northern Ireland and
Wales, should not be changed. Third parties which spend more than
£5,000 in any one constituency should be required to register with
the Electoral Commission (see paragraphs 7.20 – 7.29).
1.19 As the regulator of the system the role of the Electoral
Commission is key. The Electoral Commission has a difficult
and at times thankless task in regulating the expenditure of third
parties particularly given the very varied range of types and sizes
of third party organisations. It is clear they go to considerable
effort to try and provide guidance and support to those involved.
Nevertheless to regulate the rapidly changing world of modern
campaigning effectively they need to be more proactive and
risk-based in their approach than they are currently. There needs
to be more active engagement and monitoring of those third parties
spending significant amounts of money – particularly where this
takes place in marginal constituencies. There are areas where the
Commission’s guidance could be clearer. The Commission should
consider issuing codes of practice on key parts of the rules. Since
these would have to be approved by Parliament this will enable
third parties to claim compliance with the code of practice as a
defence in law. Overall my hope is that these recommendations will
facilitate the critical work of the Electoral Commission (see
paragraphs 7.47 – 7.67).
1.20 The recommendations in this Review aim to offer a
proportionate and considered response to the complex area of third
party campaigning. They are intended to strike the right balance
between preventing undue influence at an election without creating
a disproportionate regulatory burden for campaigners. To avoid
repeating past difficulties, if the Government were minded to take
forward the recommendations of this Review I would strongly
recommend a period of consultation on the detailed legal drafting
that will be required.
1.21 This review has taken place against a background of rapidly
changing campaigning methods. When PPERA was introduced in 2000,
the traditional forms of campaigning such as leafleting and posters
were the primary form of communication with the public. That is no
longer the case. The use of social media as a campaigning tool will
only increase and the methods and platforms used can be expected to
evolve constantly. The Government and the regulator need to be
vigilant as to emerging trends in campaigning methodologies so as
to ensure that the regulatory framework continues to strike the
right balance (see paragraphs 8.1 – 8.19).
Context of the Review 9
Context of the Review
Establishing an overarching strategy
2.1 In order to produce recommendations that are pertinent,
relevant and credible it was important for the Review first to
consider the history of the legislative provisions which regulate
spending by third parties during election periods by third parties
and understand why Parliament deemed it necessary to amend that
legislation by the provisions of Part 2 of the Transparency of
Lobbying, Non-Party Campaigning and Trade Union Administration Act
2014 (the 2014 Act).
Background to the regulation of third party campaigning
Key events up to 1998
2.2 For many years third parties, that is, those that are neither
political parties nor candidates, have played an important role in
political life generally as well as in specific elections.
Sometimes this has involved campaigning on particular policy
issues. Sometimes this has also involved explicitly campaigning for
or against a particular candidate or political party, or a policy
of that candidate or party.
2.3 Expenditure by third parties campaigning for or against an
individual candidate in a particular electoral area has been
regulated for a long time. This was because in the nineteenth
century the constituency was the focus of political activity. The
current relevant legislation governing expenditure on local
campaigns is set out in sections 73-76A of the Representation of
the People Act 1983 (RPA 1983) or equivalent legislation in
Scotland, Wales and Northern Ireland. Subsequently the emphasis
shifted away from individual constituencies to campaigning at a
national level. So the regulation of expenditure on campaigning
activities by third parties on a national level has been a more
recent occurrence.
2.4 For example the Tate and Lyle ‘Mr Cube’ campaign in 1949
opposed the Labour Party’s proposals to nationalise the
sugar-refining industry in an era where rationing was still in
place; it is perhaps worth pointing out that Labour nevertheless
won the subsequent 1950 General Election. Shortly before the
General Election the following year, 1951, Tronoh Mines Ltd, which
was campaigning against the Labour Party’s proposal of steel
nationalisation, took out an advertisement in a newspaper. A court
case was brought1 which found that the restrictions in law on the
amount allowed to be spent promoting or denigrating a candidate did
not apply to activity – in this case advertising – that promoted or
denigrated a political party generally in all constituencies.
1 R. v Tronoh Mines Ltd [1952] 1 All ER 697
2.5 Throughout the 1950s the steel industry spent money opposing
nationalisation. At the 1959 General Election the privately-owned
steel company, Stewart and Lloyds, ran a series of advertisements
in newspapers which were thought to be read by a predominately
pro-Labour readership.
2.6 More recently, at the 1997 General Election, Unison spent more
than £1 million on advertisements in favour of the introduction of
a national minimum wage. The advertisement did not mention any
political party or ask people to vote for a party; nevertheless,
this was against the well-known background of the policy being
supported by the Labour and Liberal Democrat parties and opposed by
the Conservative party.
2.7 These actions were intended to have an impact nationally. They
may not have identified specific political parties, although this
could be inferred, and, in particular, they did not identify
individual candidates.
The Establishment of the Neill Committee
2.8 Following a series of scandals in the 1990s the Committee on
Standards in Public Life, then led by Lord Neill, and so known as
the Neill Committee, carried out a review of the funding and
expenditure of political parties. Their 1998 report The Funding of
Political Parties in the United Kingdom2 set the parameters within
which the current system of regulation of political party funding
and expenditure came to be based, covering donation reporting,
expenditure limits and state funding with the intention of stopping
excessive spending at elections and cleaning up politics.
Importantly for this Review it included recommendations on
expenditure by third parties. The Neill Committee summed up its
approach to third parties as follows:
There is, of course, absolutely nothing wrong with individuals and
organisations engaging in such activities. On the contrary, a free
society demands that they should be able to do so, indeed that they
should be encouraged to do so; but, in the context of election
campaigns, they should, in doing so, be subject to the same kinds
of expenditure limits as the parties themselves.3
The Passage of PPERA
2.9 The then government accepted the vast majority of the Neill
Committee recommendations, as well as the principles behind them,
and addressed them in legislation known as the Political Parties,
Elections and Referendums Act 2000 (PPERA).
2.10 PPERA put in place a reporting framework to provide for
transparency in national party funding and national expenditure on
elections, and also established statutory limits on the amounts
that can be spent on national campaigns at elections, by political
parties and others, including by third parties.
2 Website accessed on 13 January 2016
https://www.gov.uk/government/publications/the-funding-of
political-parties-in-the-united-kingdom--2
3 The Committee on Standards in Public Life, The Funding of
Political Parties in the United Kingdom, 1998, para 10.79,
p133.
Context of the Review 11
2.11 The basic framework for non-party campaigners, as third
parties are known in PPERA, is similar to that for political
parties: Part 6 of PPERA, which deals with non-party campaigners,
established limits on expenditure together with controls on
donations at General Elections, European Parliamentary elections
and elections to the devolved legislatures; referendums are
regulated under Part 7 of PPERA. The Electoral Commission
(established under Part 1 of PPERA) was given the responsibility of
regulating the system. PPERA was amended several times before the
2014 Act, including by the Political Parties and Elections Act 2009
which tightened reporting requirements and increased the
information which must be included in electoral returns.
2.12 The regulatory system as originally established was partly in
place for the 2001 General Election and fully in place for the 2005
and 2010 General Elections – the amendments to PPERA in the 2009
Act did not come into force until after the 2010 General Election.
The Electoral Commission did not report any significant problems
with the activities or expenditure of non-party campaigners at
those elections.
2.13 However, it was argued by some that there remained the
opportunity for third parties to be used as a way of avoiding the
political parties’ and candidates’ expenditure limits by spending
excessively in a particular constituency or group of constituencies
with the intention of influencing the result of the election, thus
possibly undermining the basic purpose of PPERA, as well as
avoiding the controls on spending in individual constituencies set
out in the RPA 1983 by focusing ostensibly ‘national’ election
spending in certain target seats. The RPA 1983 controls
contain different regulatory requirements, enforcement procedures
and purpose tests and are in force for a shorter period of time
than the rules which apply to third party campaigning at a national
level under PPERA.
Electoral Commission review
2.14 In 2013 the Electoral Commission conducted a review of the
UK’s political party and election finance laws4, which considered,
among many other issues, third party expenditure at elections. It
drew attention to the apparent discrepancy between what expenditure
was covered by the rules on electoral campaigning for political
parties and the then national spending rules for third parties. The
PPERA rules on non-party campaigning applied only to expenditure on
election material, and not to expenditure on other campaigning
activity such as events, media work or market research on polling
intentions, which are included in the rules for political parties.
The Electoral Commission therefore made the following
recommendation.
The rules on PPERA non-party campaigning that is intended to
influence voters should be changed so that they more closely
reflect the scope of rules for political parties by covering
events, media work and polling, as well as election material. It
would be necessary to review the implications for the campaign
spending limits set by PPERA.5
4 A Regulatory review of the UK’s Party and Election Finance Laws:
Recommendations for Change; The Electoral Commission, June
2013
5 A Regulatory review of the UK’s Party and Election Finance Laws:
Recommendations for Change; The Electoral Commission, June 2013
(Recommendation 29, p58)
Government plans and the will of Parliament
2.15 The then Government accepted the thrust of the Electoral
Commission’s recommendation and brought forward proposals which
eventually became Part 2 of the 2014 Act. The stated intention of
the proposals was to avoid the possibility that third parties could
exert ‘undue influence’ at the election due to excessive
expenditure and to provide transparency as to sources of funding
and expenditure. The Rt Hon Andrew Lansley, the then Leader of the
House of Commons, stated on 3 September 2013 during the Committee
stage of the Bill:
It is good that people are motivated to campaign for what they
believe in, whether they do it inside or outside a political party.
Campaign groups play an important role in the political process.
That will continue and it has never been in doubt. The intention of
this Bill is to bring greater transparency when third parties
campaign in an election. Relevant expenditure on such campaigns
will now be more fully recorded and disclosed. To avoid the
situation we see in some other countries, where vast amounts of
money are spent without any bar or regulation.6
2.16 The Government’s proposals covered matters other than those
contained in the Electoral Commission’s proposals: introducing
constituency limits on how much could be spent on campaigning with
an effect focussed in any particular constituency or constituencies
and to prevent the avoidance of the constituency limits in the RPA
1983;7 introducing legislative provisions to regulate ‘targeted
spending’, that is, spending to support a particular political
party; and proposals to lower the expenditure thresholds at which
bodies undertaking activity in an election period had to register
with and report expenditure to the Electoral Commission.
2.17 In line with the Electoral Commission’s recommendation, the
Government proposals expanded the list of ‘qualifying matters’ to
be counted towards the expenditure limit for third party
campaigners, to bring them more closely in line with the list for
political parties.
2.18 The Bill received its Second Reading on the last day before
the House of Commons rose for its summer recess in July 2013 and
the Committee Stage took place in the two week September session.
There was little consultation and no pre-legislative scrutiny of
Part 2 of the 2014 Act. The other two parts of the Bill, though
nothing to do with non-party campaigning, also proved
controversial. Many expressed concern that the Bill had been unduly
rushed and was intended to (or would have the effect of) stifling
debate rather than its espoused objective of clarifying and
tightening the existing law. A significant number of NGOs and
charities reacted negatively to the proposals in Part 2, seeing
them as an attempt to ‘gag’ their organisations from speaking out
against the Government (indeed the 2014 Act was referred to in some
circles as ‘the Gagging Law’).
2.19 The Electoral Commission expressed concerns about the legal
uncertainty that some of the definitions and measures could cause
as they were untested in law.
6 Hansard, HC Deb 3 September 2013, vol 567, col 180. 7 By amending
sections 29, 94 and 96 PPERA to include per-constituency limits on
the sums which can
be spent by third party campaigners and to require those registered
with the Electoral Commission to account for controlled expenditure
in each constituency as well as nationally.
Context of the Review 13
2.20 These concerns were not assuaged by assurances from the
Government as to its benign intentions. Andrew Lansley stated on 3
September 2013 that:
[the Government is] very clear that we are in no sense seeking
substantively to change the boundary between campaigning on
policies and issues, which charities and other third parties do to
a substantial extent, and being required to register spending for
electoral purposes [...]. We are not proposing to change the
boundary, so charities, think-tanks, non-governmental organisations
and campaign organisations should not be alarmed that this Bill
will impact in any sense on their ability to campaign on policy
issues.8
Pause in the proceedings of the Bill
2.21 The concerns of the charity and NGO sectors about the
proposals in the Bill led, inter alia, to the establishment of the
Commission on Civil Society and Democratic Engagement chaired by
Lord Harries of Pentregarth. After receiving evidence from a wide
range of stakeholders, the Commission published two reports
critical of the proposals in the Bill, one in October 2013, and one
in November 2013. The Government reacted to the controversy by
pausing the passage of the Bill through the Lords for six weeks
between Second Reading and Committee Stage to allow more time for
consultation.
2.22 The Government made a number of amendments at Report stage in
the Lords, including, significantly, raising the threshold for
registration, and in section 39 requiring a review to examine the
functioning of the whole system of regulating non-party
campaigning, as established in PPERA and amended by the 2014
Act:
The Minister must, within the period of 12 months beginning with
the day on which this Act is passed, appoint a person to conduct a
review of the operation of Part 6 of the Political Parties,
Elections and Referendums Act 2000 in relation to the first
relevant parliamentary general election.
2.23 This Review is the fulfilment of that commitment and in the
pages that follow the issues that gave rise to these concerns are
addressed one by one.
The Principles of the Review
2.24 The Review has sought to take account of first what Parliament
intended to achieve by this legislation and then to assess whether
the legislation achieved those aims. After reviewing the
Parliamentary proceedings, taking into account the proposals of the
Neill Committee on which the PPERA provisions were based and
discussions with interested parties, the following statement of
principles was drawn up to encapsulate what it is that the
regulation of third parties should be trying to achieve:
Hansard, HC Deb 3 September 2013, vol 567, col 170. 8
14 Third Party Campaigning Review
To maintain the rich diversity of public participation and
involvement which historically has characterised British elections
while not jeopardising public trust and confidence in the integrity
of the electoral system.
To achieve this:
a. As regards the voting public by providing clarity and
transparency about significant campaigning activity undertaken with
a view to influencing the outcome of an election, especially any
with an underlying party political motivation, and
b. As regards third parties by establishing a regulatory system
which is comprehensible and proportionate and does not discourage
third parties from campaigning.
2.25 The current legislative framework has been assessed against
these principles and the recommendations produced to strengthen and
clarify the legislative framework are designed to deliver those
principles.
Third Party campaigning in practice at the 2015 General
Election
Who registered?
2.26 At the 2015 General Election 68 third parties were registered
with the Electoral Commission, of which 47 were registered
specifically for the 2015 General Election (see Appendix D for
further details). These included trade unions, charities,
individuals, companies and others. There were also of course other
third parties that were active that were not required to register
because they did not meet the financial threshold for registration.
While for some of the third parties registered with the Electoral
Commission the general purpose of their campaign was immediately
clear, that was not the case for all of them, in particular the six
individuals that were registered.
2.27 Only 23 third parties submitted spending returns, with a total
expenditure of £1.8m. None of those that registered spent over
£250,000 or anywhere close to the spending limit. By way of
comparison, the reported total national spend of all the political
parties was £37.3m. Reported third party expenditure was therefore
only 4.8% of the sums spent by all the political parties
combined.
2.28 There were 33 campaigners registered at the 2010 General
Election, compared with 25 in 2005. After the 2010 election,
23 of these campaigners reported total expenditure of £2.8 million
– around 9% of the £31.5 million spent by political parties on
national campaigning.
Context of the Review 15
The jigsaw nature of the proposals
2.29 One of the challenges the Review has faced has been to
understand how the different parts of the regulatory system
contained in the 2014 Act and PPERA interact and what the impact of
a change to one particular aspect of the rules governing third
party expenditure at elections would be on others. Some elements
such as duties to report donations are discrete and standalone.
Others such as the definitions of who, what types of expenditure
and on what activities should be regulated, the length of the
regulated period and appropriate spending limits, all interact with
one another. Therefore, the key recommendations of this Review
(primarily those in Part 2) have been constructed and are proposed
as a package: accordingly implementation of only some of the key
recommendations would undermine the intention of the proposals
taken as a whole, and could have the potential to undermine the
delicate balance which has been struck.
The structure of the Review
2.30 In order to highlight the interlinking elements of the system
of controls on election expenditure, the Review has been split into
the following sections.
2.31 Part one considers whether Part 2 of the 2014 Act, and
controls on expenditure by third party in election campaigns, are
necessary.
2.32 Part two examines the overall structure, in particular
focusing on expenditure by whom, on what activity and over what
period should be controlled.
2.33 Part three looks at what specific activities spending controls
focus on, covering the types of electoral campaigning and how staff
costs should be treated.
2.34 Part four considers the issues around the levels of spending
limits, and the interactions of different limits, in particular
focusing on the spending limits at the national and constituency
levels (as well as elections to the European Parliament and to the
devolved legislatures) and examining targeted spending and joint
campaigning.
2.35 Part five deals with the issue of registration with the
Electoral Commission, including the information that needs to be
provided when registering, the thresholds for registration, the
reporting requirements and how the system is regulated in practice
by the Electoral Commission.
2.36 The final chapter draws attention to the challenges for the
future – beyond the immediate compass of the Review – including
whether the current system of regulating third party campaigning
can keep pace with the rapid changes in campaigning methods, such
as likely technological advances, as well as potential changes to
the nature of politics.
16 Third Party Campaigning Review
Part one – Is any regulation of third parties necessary? 17
Part one – Is any regulation of third parties necessary?
What is the issue?
Given the relatively low level of third party expenditure on
‘qualifying activity’ to date, and the widely perceived adverse
impact of the controls governing election expenditure on
participation in debate by third party campaigners, a necessary
first question is to ask whether, and if so, why, any controls on
expenditure are required at all.
3.1 This Review examines how controls on election expenditure by
third parties work in practice. In summary, the major changes
introduced by the 2014 Act reduced the overall maximum expenditure
limits, widened the range of activities expenditure on which had to
be accounted for and increased the threshold for registration. In
addition, it introduced two new concepts: a constituency spending
limit, which applies to spending aimed at one or more particular
constituencies; and targeted spending, which covers campaign
activity aimed at influencing voters to vote for a political party
or any of its candidates.
What evidence was received?
3.2 Despite the relatively small number of third parties which
registered with the Electoral Commission, of which even fewer
completed spending returns, a high number of organisations felt
they were adversely affected by the new controls on expenditure and
reporting requirements set out in the 2014 Act.
The chilling effect
3.3 Ahead of the General Election there was a lot of discussion as
to a potential so-called ‘chilling effect’ of the new rules which
regulated the activities of third parties. Concerns were expressed
that the 2014 Act was preventing organisations from legitimate and
important campaigning activities. The new rules were designed to
prevent undue influence on the election, not to prevent the
important work of third parties in engaging in the political
debate. Accordingly any evidence found of a general inhibition of
activity would be of concern.
3.4 There is little doubt that the controversial circumstances of
the passage of the 2014 Act led to it being implemented in a
heightened atmosphere of concern within the charity sector and
wider civil society. This concern was not confined to rules
affecting their activities at elections or uncertainty as to what
steps they had to take in order to comply with the new third party
campaigning rules but also concern as to what the consequence of
such regulation might be on how their roles in society might be
perceived more widely.
18 Third Party Campaigning Review
3.5 A number of fundamental misunderstandings about the nature of
Part 2 of the 2014 Act have persisted. For example, a number of
third parties appeared not to have appreciated that Part 2 of the
2014 Act was not a ‘new’ piece of legislation, rather an expansion
and tightening of the rules already existing under Part 6 of PPERA.
In meetings held in the course of this review, more than one
organisation recognised that they probably should have done more to
consider their legal obligations at the time of the 2010 General
Election under the pre existing regime. Equally some third parties
suggested that the original rules were problematic prior to their
amendment by the 2014 Act, but the expansion of their scope by that
Act increased the difficulties associated with compliance.
3.6 Some of the tension undoubtedly arose from the fact the
amendments to the legislation were new and untested. The Electoral
Commission and the charities regulators faced a difficult task in
producing guidance. Further, the guidance and informal advice they
gave appeared to evolve quite rapidly in the run up to and during
the election and this contributed to the sense of
uncertainty.
3.7 Similar challenges existed for legal advisors faced with
requests for advice from their clients and uncertainty and lack of
judicial interpretation as to the scope of the law may have led
some advisors to be particularly cautious. In addition, key
decision makers in third parties, such as trustees, may have chosen
to avoid exposing their organisation to any risk, perceived or
real, by refraining from participating in sensitive policy debates
during the course of the election campaign.
3.8 A key challenge for the Review was to find counter-factual
evidence showing that third parties altered their behaviour
specifically because of the provisions in the 2014 Act or indeed
PPERA rather than for some extraneous reason. The Review team heard
various accounts of organisations which had not undertaken a
particular activity because of the 2014 Act, but much of the
evidence was second-hand or in relation to activities that were not
actually regulated by the legislation, such as the holding of
hustings at a constituency level. It was therefore far from clear
the extent to which it was the reality of the legislation’s
provisions rather than the perception of what restrictions they
imposed, which affected organisations’ behaviour.
3.9 Against this somewhat confused background it was nevertheless
clear was that there was an atmosphere of increased nervousness and
caution in relation to third party campaigning in the 2015
election. However, it would not be unreasonable to assume that,
with the experience of the 2015 General Election, non-party
campaigning at the next General Election in 2020 may be conducted
in a calmer atmosphere, as those involved will have become more
familiar with the regulatory requirements set out in PPERA as
amended by the 2014 Act. On the other hand, there were one-off
concessions in the 2014 Act which applied only to the 2015
election, such as a reduced regulated period. As these concessions
will not apply automatically in relation to future elections, it is
possible that concerns in some areas will not disappear.
Part one – Is any regulation of third parties necessary? 19
The applicability of the restrictions on third party campaigning to
modern campaigning methods
3.10 PPERA was passed in 2000 before the social media explosion
took place. PPERA’s basic structure belongs to an age where
communication with individual electors was based primarily on
face-to-face meetings, delivery of printed material and some
telephone canvassing. Unsurprisingly its provisions do not
therefore directly address the particular challenge of social
media, targeted advertising using big data, and viral marketing
campaigns.
3.11 Social media is increasingly being used as a tool for
individuals to engage with politics. According to data from IPSOS
Mori, 58 per cent of British adults regularly use social networking
sites, with 55 per cent of adults using Facebook and 17 per cent
using Twitter.9
Social media allows for individuals with similar interests to get
together and share ideas and thereby, if they wish, to engage in
the electoral process. “On social media it is possible to start
protesting in a small way without much investment or risk; thus
helping participants get accustomed to seeing themselves as
activists.”10
3.12 However, it is not just individuals who have recognised the
utility of social media: organisations, whether they be third
parties or political parties, have been quick to recognise its
effectiveness as a tool for communication. The Conservative Party
reported spending of £1.2m on Facebook in the regulated period for
the 2015 General Election.11 Other political parties also used such
communication channels.
3.13 Social media offers the opportunity for an individual or
organisation to communicate instantly with thousands of people,
quickly and potentially cheaply. That said, for it to be effective
such communication needs to be targeted at those it is likely to
influence. This leads to what is known as ‘data mining’ – the
process of identifying the audience and tailoring the message to
ensure that it resonates effectively with those who receive it.
Although this can be expensive, the use of data mining is likely to
increase. The Information Commissioner’s Office recently imposed a
fine on the Telegraph Media Group12 for an email sent to
subscribers to its various email notification services on election
day, and this highlighted the fact that organisations need to be
increasingly careful about how they use the information they
collect and for what purposes it is collected including its use for
electoral campaigning.
3.14 One problem for seeking to regulate expenditure on targeted
online political advertising or campaigns is that its effectiveness
rests on the development of an effective database and information
about the people on it. The development of such a database is
expensive and takes time. The costs of actually sending messages
during the campaign period are relatively
9
https://www.ipsos-mori.com/researchpublications/publications/1733/Ipsos-MediaCT-Tech
Tracker-Q1-2015.aspx
10 House of Lords Library Note, Digital Democracy,: Political
Participation and Citizen Engagement through the Internet, 13
October 2015, Page 10
11 Electoral Commission
http://search.electoralcommission.org.uk/Search/Spending?currentPage=1&rows=10&query=Conservat
ive%20Facebook&sort=DateIncurred&order=desc&tab=1&open=filter&et=pp&evt=ukparliament&ev=445
accessed on 20 January 2016
12 ICO website
https://ico.org.uk/about-the-ico/news-and-events/news-and-blogs/2015/12/ico-fines
telegraph-media-group-for-election-day-email-campaign/ accessed on
20 January 2016
20 Third Party Campaigning Review
low, so limiting ‘election spend’ during the regulated period may
prove to be increasingly ineffectual and irrelevant.
3.15 It would be undesirable and damaging to genuinely free
democratic debate if access to power were to depend on the ability
to spend money in getting a message across; this applies whether
spending is undertaken by political parties themselves or by others
on their behalf. Having some controls on expenditure on elections
is a necessary means to achieving that end.
Conclusion
3.16 Although some consultees argued for the simple repeal of Part
2 of the 2014 Act, the majority view was that some form of
regulatory framework for third party campaigning is required and I
agree.
3.17 In part this is to create a structure which ensures
accountability for election expenditure so that the public is aware
of who is spending significant amounts on getting their messages
across. But, equally importantly, it is to ensure that the
reputation and activities of genuine third party campaigners are
not sullied by the activities of a few. Controls on expenditure are
desirable to ensure transparency and to avoid an ‘expenditure arms
race’ by limiting expenditure on elections at a reasonable level.
Any such limits would be undermined if they only applied to
political parties and candidates themselves and not to third
parties which might undertake significant expenditure with a view
to influencing the outcome of an election.
3.18 The rapidity of these developments mean that how election
expenditure can be controlled in a meaningful way needs to be kept
under review. They do not affect the question of principle as to
whether it is desirable to maintain any such controls at all.
Recommendation R1. Restrictions on third party expenditure at
elections are necessary. However, the rules governing this should
be amended, as recommended in the following chapters.
Part two – Legislative structure 21
Part two – Legislative structure
4.1 The legislative structure governing third party campaigning
establishes its primary control by setting a series of limits on
spending levels. But it also specifies the categories of
organisation that can fall within the remit of PPERA; it lays down
types of costs and the purposes to which they will be put that can
have the effect of triggering the regulatory provisions; finally,
through the Electoral Commission’s public test, those categories of
the public who can be communicated with outside the provisions of
the Act are identified. Each of these issues is dealt with
separately in the following sections.
How are third parties defined? What is the issue?
PPERA lays down categories of organisation that fall to be
regulated. During the passage of the Bill various parties raised
concerns about the breadth of the list — especially as regards
charities for which party political activity is unlawful.
4.2 For the purposes of PPERA third parties are defined widely but
are essentially any organisations that are engaging in activities
at an election which may influence how people vote. They may be
campaigning for or against a political party or candidates or
campaigning on an issue that some candidates or political parties
support or oppose. By definition a third party is not contesting
the election directly by fielding candidates. Once the third party
is required, as a consequence of the provisions of the legislation
discussed in the sections that follow, to register with the
Electoral Commission it becomes a ‘recognised third party’.
What organisations are caught?
4.3 Under PPERA the following can register as third parties:
• an individual; • registered political parties; • companies; •
trade unions; • building societies; • limited liability
partnerships; • friendly, industrial or provident societies; •
charitable companies and charitable incorporated organisations; • a
body incorporated by Royal Charter;
22 Third Party Campaigning Review
• a Scottish partnership; and • any unincorporated
association.
4.4 For an individual to be able to register as a third party he or
she has to be resident in or on the electoral register in the UK.13
For any of the organisations to be able to register they have to be
registered in the UK and carrying on business here. The regulation
captures all third parties that meet the relevant criteria, with no
regard to the size or nature of the organisation.
Who registered for the 2015 General Election?
4.5 Of the 68 organisations which were registered as third parties
with the Electoral Commission at the 2015 General Election there
were: 40 companies (of which the Review believes ten were also
charities although the Electoral Commission’s register makes no
distinction between the two); 11 unincorporated associations (of
which one was a charity): 11 trade unions, and six
individuals.
What evidence was received as to the categories of third
parties?
4.6 Evidence the Review gathered indicated firstly a general
agreement that there should be regulation of the expenditure of
third parties in relation to activity at elections, and secondly
that the rules as to registration should be blind as to the type of
organisation undertaking the activity, and should depend instead on
how much an individual or organisation intended to spend.
4.7 Some respondents considered that charities should not be caught
by the rules either because their activity must necessarily fall
outside any proper definition of ‘electoral activity’ since they
are not permitted, by law, to support political parties or
candidates, or by saying that any regulation of their activities of
whatever kind should be undertaken by the charities’ regulators14
rather than the Electoral Commission. Others thought that
businesses were not sufficiently aware of the legislation. The
media, including newspapers, are not covered by the rules governing
third party expenditure, and this exclusion was criticised as
illogical by some respondents who pointed to the influence the
press can have at election time. This issue is returned to in the
final chapter Challenges for the future.
Conclusion
4.8 Since one of the fundamental purposes of PPERA is to maintain
public trust and confidence in the integrity of the electoral
system it must be right that any regulation should apply to all
such participants, regardless of their size or status.
13 In addition, individuals resident in or on the electoral
register in Gibraltar are included, as are companies based in
Gibraltar. While electors in Gibraltar cannot vote in the UK
Parliament they are able to vote in UK elections to the European
Parliament.
14 The Charity Commission for England and Wales, the Office of the
Scottish Charity Regulator, and the Charity Commission for Northern
Ireland.
Part two – Legislative structure 23
4.9 Despite the perception among some that business organisations
are not covered by the provisions of the Act, they very clearly
are. It may be that the Electoral Commission should look at
ensuring that businesses are fully cognisant of the rules in
advance of the next relevant elections.
Recommendation R2. There should be no change to the current
definitions of third parties in section 85(8) PPERA and of
recognised third parties in section 88 PPERA.
What activities can trigger regulation? What is the issue?
During the passage of the Bill strong views were expressed that it
was not possible to provide a sufficiently clear definition of the
type of activity and/or purpose that would be caught by the
legislation. The consequences would be, the argument went, that the
voice of civil society would be diminished.
4.10 Under PPERA as it stood before the passage of the 2014 Act,
‘controlled expenditure’ used to mean expenses incurred by or on
behalf of the third party in connection with the production or
publication of election material made available to the public at
large or any section of the public.15 As amended by the 2014 Act
the definition became wider. The relevant provisions of PPERA
(section 85 and schedule 8A) now list a variety of activities upon
which expenditure can amount to ‘qualifying expenses’ counting
towards expenditure controls. These include canvassing material,
conferences and public events, and market research and opinion
polls. Expenditure on these activities are ‘qualifying expenses’
whether or not they are intended to change the voting intentions of
electors if, in accordance with section 85 of PPERA, “the
expenditure can reasonably be regarded as intended to promote or
procure electoral success at any relevant election for:
• one or more particular registered parties; • one or more
registered parties who advocate (or do not advocate) particular
policies […];
and • candidates who hold or do not particular opinions […].”
4.11 The application of the test of what someone might ‘reasonably
regard’ as the purpose of the expanded categories of qualifying
expenditure on promoting particular policies or opinions led to
considerable uncertainty. It was argued that the consequence of the
legal framework was to stifle the voice of civil society
organisations.
15 Section 82 PPERA before amendment by section 26 of the 2014
Act.
24 Third Party Campaigning Review
What is the purpose of the regulation of the expenditure on
activities by third parties?
4.12 It is important to be clear about what the legislation is
seeking to achieve, and in consequence what it should be seeking to
capture. The strategic overarching approach sets out the key aims
as being to increase transparency and to reduce the possibility of
undue influence by excessive or undeclared expenditure. Judging
from the organisations that registered as third parties at the 2015
General Election, campaigning third parties tend to have a primary
purpose not connected directly with campaigning at elections. There
have been few third parties that were set up solely to campaign at
elections. The balance to be struck is the extent to which any
organisation or person which comments on public policy on an
ongoing basis, if it continues to do so at the time of an election,
should have to limit and account for its expenditure.
4.13 To help clarify thinking on this difficult issue the
consultation paper issued by the Review identified three broad
areas of activity that third parties carry out that could, in the
broadest sense, be termed campaigning.
4.14 These areas of activity are:
• advocacy, that is ‘business as usual’ campaigning activities
which the third party carries out in one form or another year on
year, with a regular pattern of events, activities and very often
expenditure. In many cases this is the ‘bread and butter’ purpose
for the third party’s existence;
• political campaigning, that is, activity undertaken specifically
in the run-up to and, to a lesser extent, during an election
campaign; for example, attempts to influence the wider political
process in the run up to a General Election, to shape the terms of
debate and to influence which issues will be prominent in the
political parties’ manifestos; and
• electoral campaigning, that is, activity that is intended to
influence people’s voting choices in the run-up to and during the
election at a time when the general public has ‘switched on’ to the
political process.
4.15 These are not discrete categories of activity and the
boundaries between them are not clear ones. Rather, the activities
inevitably overlap. For example an organisation might well be
seeking to influence political parties’ manifestos (‘political
campaigning’) while continuing with its normal advocacy work at the
same time. However, only the third category is clearly intended to
affect the prospects of particular parties or candidates in a
particular election.
What evidence was received?
4.16 Opinion was divided among respondents to the consultation as
to whether a meaningful distinction can be made between ‘advocacy’,
‘political campaigning’ and ‘electoral campaigning’. The
distinction is seen to be nuanced, especially if the activity is
taking place during a regulated period. One respondent said that
such a distinction was not possible; another that the three were
essentially the same with the difference being when, where and how
the activity took place; another respondent disagreed with this
view arguing that the activity could not be defined solely by the
time period in which it took place. But respondents broadly agreed
that if there is to be regulation then it should focus on
‘electoral campaigning’ and in particular the use of money to
undertake such activity.
Part two – Legislative structure 25
4.17 Others drew a distinction between ‘political’ and ‘party
political’ campaigning, in line with the distinction made in the
Charity Commission for England and Wales’s Speaking Out:
Campaigning and Political Activity by Charities,16 known as CC9.
Some of the respondents thought that only the latter should be
regulated, and charities should not or could not, due to their
status as registered charities, be undertaking activity that would
fall to be regulated.
Conclusion
4.18 The distinction between advocacy, political campaigning, and
electoral campaigning, while far from perfect, is a useful one to
make conceptually. All three activities are perfectly legitimate
and make a valuable contribution to our democracy and to wider
civic life. Advocacy of an issue is an important way for charities,
trade unions, companies and others to influence public debate.
Political campaigning contributes to a healthy democracy, whether
it is seeking to influence the legislative programme of the
Government or the content of a political party’s manifesto.
Similarly electoral campaigning by third parties has a vital role
in ensuring the flourishing of a healthy democracy, as the Neill
Committee recognised.
4.19 Three key elements can be identified in any campaigning: when
the campaigning is taking place; who the audience is; and whether
the intent is to influence that audience. The regulation of third
parties should seek to regulate only electoral campaigning, that
is, activity intended to influence people’s voting choices in the
run-up to or during the election campaign. It should not seek to
regulate the normal campaigning activities of organisations or
individuals where that could more properly be described as advocacy
or political campaigning.
Recommendation R3. The statutory definition of ‘procuring electoral
success’ should be narrowed so as to capture only electoral
campaigning – that is activity which is clearly intended to
influence voters’ choices as between candidates or parties.
To what ‘purpose’ can activities/expenditure be directed? What is
the issue?
Refining the activities captured by the statute to those focused on
‘electoral campaigning’ provides some strategic clarity. But it
does not answer the more specific issue of the nature of any
‘statutory test’. During the passage of the Bill the ‘reasonably
regarded’ wording of the current test proved controversial.
16 Charity Commission for England and Wales website, accessed 8
February 2016 https://www.gov.uk/
government/publications/speaking-out-guidance-on-campaigning-and-political-activity-by-charities-cc9
26 Third Party Campaigning Review
What does the statute say?
4.20 The definition of ‘controlled expenditure’ by a third party is
set out in section 85 of PPERA (see Appendix C), which defines what
counts as “controlled expenditure” for third parties.17
4.21 Expenditure on a particular activity is controlled where it
“can reasonably be regarded as intended to promote or procure
electoral success at any relevant election” for political parties
or for candidates, or for categories of candidates, including those
that support or oppose a particular policy.
4.22 This definition means that the current test for whether
expenditure on an activity should be regulated depends on how the
purpose of the activity could be perceived by an observer, that is,
how it can be ‘reasonably regarded’, and not the actual intention
of the person undertaking the activity. While the test of
reasonableness is one that is well-established in law, there is a
widely held view that it may cause difficulty to the third party
undertaking the activity. Since it cannot always be sure how the
purpose of an activity could reasonably be regarded by others, it
cannot be sure whether expenditure on that activity is caught by
the legislation, which may have the effect of dissuading it from
expressing its views in areas of legitimate public debate.
What other statutes exist?
4.23 Other areas of electoral law which are aimed at the concept of
capturing electoral campaigning by regulating expenditure by third
parties contain slightly different tests. First, the RPA 1983 deals
with general electoral activity after the dissolution of
Parliament. Section 75 of the RPA 1983 provides that expenditure on
an activity is only regulated if the person undertaking the
activity does so ‘with a view to promoting or procuring the
election of a candidate’. Similarly Part 7 of PPERA sets out the
rules for referendums, again using the words ‘with a view to
promoting or procuring’, a particular outcome in relation to any
question asked in the referendum. These tests focus on what the
third party actually means to do, not what others might think they
mean to do.
What evidence was received?
4.24 Given the centrality of this issue, special importance was
given to collecting as wide a range of evidence as possible on it.
Respondents to the consultation paper were specifically asked
whether the test for determining what is controlled expenditure by
a third party is the right one, whether it could be built upon, or
whether it would be better to use a test of ‘actual intention’
along the lines of the definitions in the RPA 1983 and Part 7 of
PPERA.
4.25 Many respondents saw the ‘reasonably regarded’ test as
inherently uncertain, given its dependence on another person’s
judgement. Such uncertainty means that organisations that had no
intention to influence voter choices still believed they needed to
be circumspect regarding their activities which might be seen by an
outside observer as designed to influence voters at the
election.
17 As at 5 February 2016, the version of PPERA on
www.legislation.gov.uk has not been updated to incorporate the
changes made by section 26 of the 2014 Act, which must be viewed
separately.
Part two – Legislative structure 27
4.26 There is a further complication. In the course of the hurly
burly of a General Election, an issue on which a particular third
party has a long record of campaigning – its ‘business as usual’ –
might well assume heightened significance as a result of some
external event over which the third party has no control. As a
result the third party might unexpectedly become directly involved
in the election campaign, finding itself undertaking activity which
suddenly falls to be regulated, without having had any intention of
doing so. In addition, it was felt that the ‘reasonably regarded’
test could also allow for malicious complaints to be made designed
at stopping an organisation campaigning or aimed at damaging an
organisation’s reputation.
4.27 Evidence received in support of a test of the ‘actual
intention’ test noted the precedent in the RPA 1983. That test was
seen as being clearer, providing more certainty, and being easier
to apply for organisations. Such a test was seen as likely to
lessen the alleged ‘chilling effect’ while still providing
regulators with the power necessary to control expenditure of
activity by assessing whether it was actually intended to affect
the result of the election. Unintended consequences, such as when a
political campaign suddenly moves into a third party’s campaigning
area, would also be avoided.
4.28 It can be argued that it is undesirable for there to be
different tests for what can fall within the definition of
‘controlled expenditure’ by third parties, depending on whether one
is looking at constituency level or national campaigns. One
respondent suggested that both main pieces of the legislation
relating to third party campaigning, that is PPERA and the RPA
1983, should be consolidated into a single statutory regime, and
that this should be based on the actual intention test contained in
the latter.
Conclusion
4.29 The test that needs to be met for expenditure on activity to
be regulated is the difficult balance to be struck between
providing on the one hand a proper level of transparency and
protection against undue influence without creating undue
regulatory uncertainty on the other.
4.30 The current definition appears to have created some
uncertainty among third parties as to whether certain activities
will fall to be regulated and consequently as to what they can say
and do during the course of an election campaign. It is arguable
that uncertainties like this are inevitable with new, or in this
case amended, legislation being implemented for the first time and
that this uncertainty has been increased by the natural caution of
professional advisers and absence of case law based on the
provisions of PPERA.
4.31 As noted in the previous section, the activity that should be
captured is that described as ‘electoral campaigning’, that is,
activity intended to influence people’s voting choices in the
run-up to or during the election. It cannot be denied that other
activities, such as advocacy or political campaigning, may have an
incidental effect of influencing to some extent how people vote,
but the focus of the regulation should surely be to capture
activity that is actually intended to influence voters, not
activity which does so unintentionally or appears to others to be
doing so.
4.32 The recommendation is therefore to move from controlling
expenditure on activity which may be ‘reasonably regarded’ as
intended to affect the result of an election, and instead adopting
the narrower and clearer test in the RPA 1983, which focuses on
whether the actual
28 Third Party Campaigning Review
intention of the third party undertaking the expenditure is to
affect support for a particular candidate or candidates or party at
an election.
4.33 There are a number of ways in which such an amendment to the
legislation could be made. The existing language in the RPA 1983
provides a model: it contains the words “with a view to promoting
or procuring the election of a candidate”. This wording could be
expanded to include multiple candidates and political parties.
Using this definition has the advantage of building upon provisions
already agreed by Parliament. There is also already significant
case law around the RPA 1983 definition of third party activity,
including notably the cases of Luft, 18
Bowman,19 Tronoh Mines20 and going back to 1928 Hailwood,21 so
there is already a degree of clarity.
4.34 In short, a third party recommending voters should vote for
candidates or parties should be regulated – that is electoral
campaigning with a view to promoting or procuring the election of a
candidate or party. However, a third party which has a record of
campaigning on a particular issue continues to express support for
or opposition to that policy per se during the regulated period
should not be caught.
4.35 The intention to influence voters might not be the only or
even the primary intention of an activity, but as long as it forms
part of the intention then expenditure on that activity should be
regulated. Given this fundamental change the risk of abuse has to
be assessed. To date this test has worked well in the context of
constituency campaigning under the RPA 1983. While potentially
there would be a loophole for an organisation to campaign with a
view to affecting the outcome of the election whilst falsely
stating that this was not its intention, criminal courts are
familiar with the concept of intent and assessing the underlying
state of mind (‘mens rea’). A regulator or court looking at this
question can draw inferences as to a third party’s intention from
the surrounding circumstances. For example, the amount of money
being spent by a third party during the regulated period compared
to its average level of expenditure should also be an issue which
the regulator should consider, as would a completely new
communications strategy instituted for the regulated period.
4.36 Nor is it the case that a third party could easily evade
limits on expenditure during the controlled period before an
election by ‘frontloading’ its expenditure to before the controlled
period. Section 75(8) of the RPA 1983 and section 94(8) of PPERA
contain clear anti-avoidance provisions, which provides that where
expenditure takes place before the controlled period on activity
which takes place during the regulated period, that expenditure
counts towards expenditure limits.22 These anti-avoidance
provisions should be carried over into the amended definition of
controlled expenditure in PPERA. The anti-avoidance
18 DPP v Luft [1977] AC 962 at 982, [1976] 2 All ER 569 at 573, HL,
in the context of the Representation of the People Act 1949 s 63(1)
(repealed), which is re-enacted as the Representation of the People
Act 1983 s 75(1).
19 Bowman v United Kingdom [1998] 26 E.H.R.R. 1 20 R. v Tronoh
Mines Ltd [1952] 1 All ER 697 21 R. v. Hailwood [1928] 2 K.B.277 22
S75(8) RPA 1983, added by s25(5) of the Electoral Administration
Act 2006 provides that for the
purposes of the limits on local expenditure in s75(1) RPA 1983,
expenditure incurred before the date when a person becomes a
candidate at the election is to be treated as having been incurred
after that date if it is incurred in connection with anything which
is used or takes place after that date.
Part two – Legislative structure 29
provisions, and the guidance of the Electoral Commission, need to
ensure that the particular issues of modern campaigning techniques
are captured, including, for example, data mining and the creation
of databases which can be undertaken some time in advance of the
election and have purposes other than solely for campaigning at the
elections.
4.37 As noted above, this Review does not propose to make any
changes to the list of individuals and organisations covered at
present. But if the definition of ‘controlled expenditure’ is
changed to cover only spending on activity intended to affect the
result of an election, one effect will be that charities that
properly comply with the law which prohibits support for political
parties or candidates will not undertake activity which falls
within the controlled expenditure provisions in PPERA. That is
because a charity must not undertake activity intended to support
the electoral prospects of political parties or candidates. So
provided a charity’s campaigning activity complies with the law,
for example as set out in the Charity Commission for England and
Wales’s current guidance CC9 (see paragraph 4.17 above), then its
activities will not fall to be regulated. Any breach of charity law
in this area is a matter for the relevant charities regulators, the
Charity Commission for England and Wales, the Office of the
Scottish Charity Regulator and the Charity Commission for Northern
Ireland.
4.38 However at a later stage in the Review recommendations are
made about the need for the Electoral Commission to undertake a
more active monitoring role – particularly in marginal seats – and
work closely with the charity regulators to identify and tackle any
potential infringements.
Recommendation R4. The test for whether campaign activity should be
regulated should be one of actual intention, using a definition
along the lines of that contained in section 75 of the RPA 1983 and
with an anti-avoidance provision along the lines of section 75(8)
RPA 1983 and section 94(8) of PPERA.
Who are the public and what is a member? What is the issue?
PPERA only requires those costs incurred communicating with the
‘public at large’ to be included in controlled expenditure. This
means that communications by an organisation with its members are
excluded. The nature of what constitutes ‘membership’ varies
greatly. Moreover, PPERA was drafted at a time before social media
became ubiquitous. This development has further radically changed
the nature of “membership” both because of the increased
informality of any involvement and because the marginal cost of
contacting individuals has become very small. Further the absence
of any relevant case law on this topic has caused further
uncertainty.
30 Third Party Campaigning Review
Background
4.39 The next important issue is who can receive such electoral
campaigning material without the costs of such material being
required to be identified and included in the permissible
expenditure limit. Paragraph 1(1) of Schedule 8A to PPERA, as
inserted by the 2014 Act, describes the material expenditure on
which is regulated as follows:
The production or publication of material which is made available
to the public at large or any section of the public (in whatever
form and by whatever means).
4.40 In assessing who should count as “the public at large or any
section of the public” the Electoral Commission devised a ‘public
test’. The ‘public test’ asks whether activities are “aimed at,
seen or heard by, or involve the public”. The costs of campaigning
activity aimed at, seen or heard by, and only ‘involving’ members
and committed supporters is, under the Electoral Commission’s
public test, deemed to be exempt from regulation.
4.41 To assess whether the public test is set appropriately it is
helpful to divide members of the public into four key groups:
• members of the organisation; • committed supporters of the
organisation; • self-certified supporters of the organisation; and
• the wider public.
4.42 The salient characteristics of each of these groups are set
out below.
What is a Member?
4.43 A clear distinction can be drawn between the wider public and
those who have formally ‘signed up’ to join the organisation as a
member according to its rules. Members will have made a conscious
effort to join it and, in doing so, usually paid a membership fee.
Becoming a member usually implies a broad acceptance of the
organisation’s aims, so an organisation which communicates with its
members at election time may be thought to be unlikely to be
seeking to affect the outcome of the election by changing their
point of view. A contrary view, however, is that while members of
an organisation might expect to see ‘advocacy’ on the issues on
which that organisation campaigns, they would not necessarily
expect that to extend to ‘electoral’ activity. The organisation
might be very large, and sending a message to members of that
organisation which is intended to affect their voting intentions
might be argued to be a communication with ‘a section of the
public’.
4.44 The trade union movement represents a particularly challenging
case. This is because trade unions are organisations which have
both a political role as well as a role of providing advocacy and
social support for workers in particular sectors – roles which vary
from trade union to trade union (for example, some trade unions are
affiliated to the Labour Party, others are not). Some adopt an
uncompromising political profile, others are more nuanced. But in
all cases there is a democratic structure: as well as electing the
union’s leaders and putting forward motions regarding the union’s
policies and voting on them, the members have the right to vote on
the existence of the political fund every ten years.
Part two – Legislative structure 31
4.45 Trade unions can only conduct certain political activities if
the members have voted to establish or to continue a political
fund.23 Political activities could include campaigning on specific
issues linked to or identified with one or more political party, or
opposing another political party, as well as on wider issues such
as the NHS: it could also include explicitly supporting a political
party, including by affiliating to it. As is well known, trade
unions were among the founder members of the Labour Party. However,
an individual trade union member may contract out of paying into
the political fund.24
4.46 But whatever the organisation, not all its members may agree
with the particular campaigning that the organisation may be
undertaking at an election. It could be argued that the leadership
of the organisation may be seeking to influence its own members to
vote in a particular manner, at the same time as it is seeking to
influence others outside the organisation and therefore such
campaign activity should be regulated.
4.47 In addition, there exists the possibility that organisations
could use their members to disseminate campaigning material, e.g.
through social media – in effect running a campaign by proxy - so
there is an argument that even ‘internal’ campaigning from the
organisation should be regulated, or should be open to being
regulated, when it could be used outside the organisation.
4.48 The contrary view is that the leadership of an organisation
communicating with its members is part of the internal dialogue of
the organisation. As such it cannot be considered in such cases to
be a third party seeking to make election material available to, in
the words of the legislation, “the public at large or any section
of the public”.
4.49 Regulating what an organisation sends to its members could
risk being seen as the state intervening in the private
relationship between an individual and the organisation of which
they are a member. It could also risk artificially increasing the
amount spent by requiring some of the costs associated with
internal communications of organisations, e.g. newsletters, to be
included where these may, only in very small part, relate to
electoral campaigning.
4.50 In summary, providing an exemption for members would provide
an accurate picture of campaigning activities aimed at the public
(i.e. not the members or leadership of the third party). However,
not all members of an organisation will necessarily agree with
every campaigning line, and providing an exemption for members
would mean that campaigning activities aimed at these individuals
would be outside the regulation.
What is a Committed Supporter?
4.51 Not all organisations have memberships which can be easily
defined. For instance, the members of a faith group may be
difficult to identify as not all religious organisations have
formal categories of membership.
23 See section 72 of the Trade Union and Labour Relations
(Consolidation) Act 1992. 24 Under section 84 of the Trade Union
and Labour Relations (Consolidation) Act 1992 an individual
trade
union member may opt out of paying into the political fund. The
Government has brought forward proposals to change this to opting
in in the Trade Union Bill currently before the House of
Lords.
32 Third Party Campaigning Review
4.52 In consequence, the Electoral Commission, in consultation with
civil society organisations, has drawn a distinction between, on
the one hand, members and committed supporters and, on the other,
the wider public. As seen from the views of the respondents to the
consultation paper discussed below it is arguable whether such a
distinction is still tenable.
4.53 The current situation is that election material provided to
members and committed supporters is exempted from counting as
regulated expenditure. Therefore, as with the definition of member,
it could be seen to presuppose an alignment of the voting intention
of the committed supporter and the organisation which is not always
the case.
What is a Self-certified Supporter?
4.54 Some respondents suggested that it would be possible to extend
the current test to allow people to self-certify themselves as
‘committed supporters’ and to receive electoral campaigning
material without that falling to be counted as a regulated campaign
activity. There are various ways this could work; for example, a
person could self-certify on an ongoing, say annual, basis;
self-certify only for the duration of the regulated period at each
relevant election with renewal of self-certification required on
each occasion; or alternatively a concept of ‘unsolicited material’
could be used, as is already the case in relation to referendum
expenditure regulated under Part 7 of PPERA, which would work in a
similar manner to a person self-certifying, and thereby implicitly
requesting relevant material related to the particular issue or
campaign at the election.
4.55 The attraction of this approach is that it would provide more
flexibility as to definitions of membership so reflecting the very
different types of organisation that may have to register as third
parties.
4.56 However, conversely this creates a risk that very little
electoral campaigning might in practice be caught. It could be easy
for a person to be encouraged to self-certify, e.g. a tick in a box
in an email or even a ‘negative pledge’ with no tick being taken as
self-certification. This could potentially provide a campaigning
organisation with an easy way around the controls on regulated
activity. Transparency would therefore be significantly
reduced.
What evidence was received?
4.57 The evidence the Review has gathered reveals considerable
uncertainty about who properly should count as the public. Some
respondents to the consultation saw the Electoral Commission’s
‘public test’ as fairly clear to apply; others sought more clarity
about who should be included as a member or a committed
supporter.
4.58 In particular, there was much disagreement as to whether a
distinction between members, committed supporters and other members
of the public was still tenable. The advances in digital
communication, the various means of contacting people through
online and social media, and the different nature of organisations
was highlighted as complicating the issue. In addition, churches
and other faith organisations raised the particular difficulty of
seeking to define their members.
4.59 One respondent stated that the only practical position would
be to allow individual organisations themselves to define these
terms. Others supported the view that individua